The deceptive blogger and her false claims about her charitable giving

You may be familiar with the story of Belle Gibson. The much talked about wellness blogger built a successful business on the back of her false claims that she had defeated cancer by eating healthy and making other positive lifestyle changes. However, not-for-profits might be especially interested in what the Federal Court of Australia had to say about the application of the Australian Consumer Law (‘ACL’) to those who benefit financially from making false claims about their charitable donations.

Before it did this, the Federal Court determined that Gibson made three representations that were misleading or deceptive – that she initially had brain cancer, that she had a reasonable basis to believe that she had brain cancer and that she had had conventional medical treatment for her brain cancer. These representations were found to be ‘in trade or commerce’ and, since they were made personally by Ms Gibson and as director of her company, both her and the company were found to be liable for contravening section 18 of the ACL.

"The Federal Court determined that Gibson made three representations that were misleading or deceptive ..."

More importantly for not-for-profits, the case confirms that the ACL is an effective tool for dealing with those who make misleading or deceptive claims about donations and charitable giving. Ms Gibson’s business included a smart phone application (‘The Whole Pantry’) and a book. For a number of years, she claimed that part of the proceeds of sales of the app and the book would be donated to charities. These representations included:

•  that proceeds of the sale of tickets to the virtual launch of The Whole Pantry would go to four charities - Birthing Kit Foundation, One Girl, Asylum Seeker Resource Centre and the Schwarz Family (the family of a boy suffering from a malignant inoperable brain tumour);
• that during a week long period in May 2014, the full amount of every The Whole Pantry purchase would be donated to The 2h Project and the Bumi Sehat Foundation;
• that for a period between October 2014 and March 2015, a portion of sales of The Whole Pantry was or would be donated to rotating charities and organisations; and
• that “a large part of everything” Ms Gibson’s company earned was to be donated to charities and organisations “which support global health and wellbeing, protect the environment and provide education to those who otherwise wouldn’t have the opportunity.”

Upon investigation, most donations were not made. Birthing Kit Foundation, Asylum Seeker Resource Centre, the Schwarz Family and the 2h Project reportedly received no money from Ms Gibson or her company. One Girl and the Bumi Sehat Foundation only received one-off payments of $1,000 and $5,000 respectively, and these were received nearly a year after the charitable events had taken place. The time these payments were made also coincided with the media beginning to investigate Ms Gibson’s claims. The falsity of her claim that “a large part of everything” was to be donated was also revealed by the fact that of the $420,000 that the company received from sales of The Whole Pantry and her book, only $10,000 was donated and these donations were “sporadic, ad hoc and, as to some of them, opportunistic.” On this basis, Ms Gibson’s claims about her and her company’s charitable giving were also found to be misleading or deceptive under section 18 of the ACL.

Ms Gibson and her company were also found to have engaged in unconscionable conduct, which is a contravention of section 21 of the ACL. The Court was particularly scathing and noted that these representations that she made:

“were made to serve her own commercial interests and those of her company, as well as marketing an image of herself in the media which she clearly took advantage of. In order to secure these advantages for herself and her company (financial, business, promotional) she played on the empathy and generosity of the Australian community towards causes that were seen to be deserving. Her ‘pitch’ overwhelmingly used groups likely to evoke sympathy because of their vulnerabilities – young girls, asylum seekers, sick children. The use of Joshua Schwarz, a seriously ill child, in this way is particularly unconscionable.”

In its judgement, the Court noted that there was significant “potential drawing power of statements that a portion of sales made would go to charity.” The Court therefore imposed penalties on Ms Gibson and her company. One of these was an injunction restraining both Ms Gibson and her company from making any claim in connection with the development, sale or promotion of health and wellbeing advice that Ms Gibson had been diagnosed with brain cancer at any time prior to 24 May 2016, that she was given four months to live and/or that she had taken and then rejected conventional cancer treatments in favour of embarking on a quest to heal herself naturally. She was also ordered to pay the costs of the prosecutor, Consumer Affairs Victoria, and could face a fine at a later hearing.

Ms Gibson’s false, misleading and deceptive statements about her charitable giving have been costly for her finances and her reputation. This decision of the Court shows that the ACL won’t allow people to use the good names of charities and not-for-profits as leverage to earn a quick pay-out. 

If you have questions about charitable donations please contact %93t%82%BC%AF%A7%90%7B%A8%BE%D3u or %93z%90%B9%AB%B3%D8U%88s%BC%B6%C4%B3s.